Thursday, June 30, 2016

Silver Airways Aspires to Serve All Cuba Routes

Of the 12 U.S. airlines that are awaiting word from the DOT this summer on whether they will be able to fly commercially to Havana, it's possible that none has more at stake than Silver Airways.

The Florida-based regional carrier is gambling that it can score big with opportunities offered by Cuba flights. So much so, in fact, that Silver is the only carrier that applied for service to all 10 of the Cuba markets that will be opened up under the air agreement the U.S. and the island nation entered into early this year.

Silver has already been approved to fly to nine of those locales. Indeed, the carrier's first flight, from Fort Lauderdale to Santa Clara, takes to the sky on Sept. 1. Flights to Camaguey, Cayo Coco, Cayo Largo, Cienfuegos, Manzanillo, Matanzas and Santiago de Cuba are all scheduled to take to the air by Dec. 16. And in the Cayo Coco, Cayo Largo and Manzanillo markets, Silver will be alone along among U.S. airlines, as none of it competitors applied to service those airports.

Historically, Silver has made its income primarily through intra-Florida flights as well as flights from Fort Lauderdale to eight Bahamas locales, mostly from Fort Lauderdale.

At present, of the carrier's approximately 60 roundtrips per day, a bit more than half are within Florida, while Bahamian flights make up about a fifth. Silver also has a mid-Atlantic network based out of Washington Dulles.

That route makeup is about to be rebalanced, however.The DOT has already approved Silver for the equivalent of 5.5 roundtrip to Cuba per day. (That figure includes routes that would travel less than daily, therefore accounting for only a fraction of a roundtrip per day when averaged over a weekly period.)

To prepare for the start of that service, Silver has decided to pull out of Panama City's Northwest Florida Beaches Airport effective Aug. 15, said the carrier's CFO Jason Bewley. Silver currently services Panama City from Tampa and Orlando.

"It's something we thought we should look at going into the off-season as we start Cuba," he said, explaining that the move will enable Silver to shift two of its 34-seat Saab 340B twin-propeller aircraft onto Cuba routes.

Bewley said that Silver doesn't plan to pull out of any other of its 10 Florida destinations, nor does it plan to cut frequencies to them.

But he also said that to the extent that Silver is hinging its broader strategy on Cuba, much depends on being awarded at least one Havana route.

"In order for all nine of the outer cities to work, we really believe Havana has to be part of the mix," Bewley said.

He explained that it's important to the company's strategy that business travelers, expats and even leisure travelers know that Silver is the airline they can turn to for booking to any Cuban destination.

Silver has applied for five daily frequencies to Havana; one each from Jacksonville, West Palm Beach, Key West, Fort Myers and Fort Lauderdale. Getting all those awards is a long shot. The DOT will only award 20 daily flights to Havana, and U.S. carriers have made nearly 60 applications.

Still, Bewley is confident that the DOT will look kindly on the Florida regional carrier, even as it competes against giants like American, Delta, Southwest and United. After all, he said, U.S. authorities worked hard to open up air access to 10 Cuban markets. But only Silver has walked through all of those doors.

"We've made the case to DOT that we're going to serve all 10, but in order to do that, you've got to give us Havana," Bewley said.